Monday, December 06, 2010

FT.com / Technology - Google deal collapse stirs controversy

This is the grandest Groupon gamble – i.e., that Google won’t successfully focus and compete with it

“Multiples notwithstanding, Google still has a big hole in local,” Mr Squali added. While an earlier attempted acquisition of local service Yelp might have given it a bigger foothold in this market, the purchase of Groupon, which has a proven business, would have been a far better option, he added.

Other analysts, however, disputed the strategic value of a deal. Whatever Google’s plans in local, “they don’t need Groupon to do it,” said Sucharita Mulpuru, an analyst at Forrester. “There is nothing that Groupon has that Google couldn’t build themselves, or partner with one of the other half-dozen viable contenders in the space to get for a far cheaper price than Groupon’s.”